over 10000 miles

[ContrataxLtd]

P11d it!

That's not my problem. I understand that perfectly, I'm not trying to avoid the tax, I'm trying to avoid the NICs (as HMRC state is correct). My problem is how to go about it.

If MyCo pays me 45p/mile over 10000 miles, HOW do I pay the tax? If I put it into Sage Instant Payroll I will end up paying NICs on it too, which I don't need to do. If I just pay it outside payroll as before, I will not have paid the tax. So do I declare it at the end of the year and pay tax on it then, or what? What is the mechanism for paying tax but not NICs on a sum paid from MyCo to me?

EDIT: I see I messed up in my previous post. It's not a question of it not being taxed, but of it not being subject to NIC. AIUI what I should be able to do is get paid 25p/mile free of tax and NIC, plus 20p/mile free of NIC but subject to tax. So how to treat that 20p/mile? Inside payroll, or out?

If you pay 45ppm over the 10,000 limit you can simply declare this on your P11d for the year as a BIK. The tax due on this will be payable via your self assessment.

Alternatively, if you wanted to run this through payroll then you should have an option to mark a payment as not subject to NIC. I'm not familiar with Sage Instant Payroll so can't confirm if the software does have this option.

Contratax Ltd

[Martin at NixonWilliams]

If MyCo pays me 45p/mile over 10000 miles, HOW do I pay the tax? If I put it into Sage Instant Payroll I will end up paying NICs on it too, which I don't need to do. If I just pay it outside payroll as before, I will not have paid the tax. So do I declare it at the end of the year and pay tax on it then, or what? What is the mechanism for paying tax but not NICs on a sum paid from MyCo to me?

EDIT: I see I messed up in my previous post. It's not a question of it not being taxed, but of it not being subject to NIC. AIUI what I should be able to do is get paid 25p/mile free of tax and NIC, plus 20p/mile free of NIC but subject to tax. So how to treat that 20p/mile? Inside payroll, or out?

The benefit should be declared on your P11d and then included on your tax return, so the tax will be collected then. This would only really matter for the first year. If you report a benefit for 2013/14, HMRC will automatically adjust your tax code for 2014/15.

If you do reimburse the mileage through payroll, you can set the pay type to be exempt from NI.

[expat]

The benefit should be declared on your P11d and then included on your tax return, so the tax will be collected then. This would only really matter for the first year. If you report a benefit for 2013/14, HMRC will automatically adjust your tax code for 2014/15.

If you do reimburse the mileage through payroll, you can set the pay type to be exempt from NI.

Ah so both options work. Thanks.

[CloudWalker]

But I would walk 500 miles
And I would walk 500 more
Just to be that man to walks a thousand miles to fall down at your door
(Da Da Da Da Da Da Da Da Undela Undela Undela la la la)
(Da Da Da Da Da Da Da Da Undela Undela Undela la la la)

Sorry but couldn't resist

[expat]

The benefit should be declared on your P11d and then included on your tax return, so the tax will be collected then. This would only really matter for the first year. If you report a benefit for 2013/14, HMRC will automatically adjust your tax code for 2014/15.

If you do reimburse the mileage through payroll, you can set the pay type to be exempt from NI.

That's probably the right option for me, save me from getting my tax code adjusted back again when I'm not doing the mileage any more.